Neverending problems at MAS

[Denny Yen 0]

Picked this one up from Screenshots site:

UPDATED VERSION. The internal memo circulated by MAS Chairman and acting Managing Director Munir Majid November 10 has made it to the Press, and opened up the pandora box.

 

In his memo, which was obtained by Reuters and reported by The NST November 13, Munir reportedly said, "Our financial performance is precarious and has increasingly become a source for concern. There is now a need to extend the scope of the cost reduction focus and put in place more aggressive measures".

 

The timing couldn't have come at a worse timing. According to Singapore Business Times, analysts polled by Reuters Estimates expect the airline to post a net loss of RM230 million for the year to end-March 2006. This compares with a net profit of RM326 million in the year ended March 2005.

 

Earlier, MAS has reported a net loss of RM280 million for the first quarter ended June 30, 2005.

 

With that, pundits and punditary spin - the juiciest to come is by one A. Imran who posted an opinion piece in Sang Kancil listserve, here and here.

 

It talks about "The never ending problems at MAS", notably on a few critical and often ignored counts:

 

 

Bad cash flow: Internal cashflow projections indicate that by June 2006 MAS may not have cash to pay fuel bills and meet operational requirements. Suggested remedy: Sell the ageing MAS building in Jalan Sultan Ismail to raise RM350.00, which reportedly has a market value of about RM250.00 million.

 

 

Ruffled employee sentiments: All of MAS' collective agreements have expired and are up for renegotiation with the Union. All salary increments for staff have been postponed pending the arrival of new CEO, Idris Jala, in December. However, the pilots have been given a salary increment of 25%, even before the arrival of the new MD. The Unions are complaining about this.

 

 

Significant wastage in inflight catering: It points to a company called SkyChef, a joint venture with Lufthansa which has taken over the job of MAS Catering. The Sang Kancil posting has Ibrahim Abdullah quoted as a shareholder in SkyChef. However, another source says it's Ibrahim Hj Ahmad Badawi, and not Ibrahim Abdullah, who is the largest shareholder of Brahim LSG Sky Chef Holdings Sdn Bhd. (Anyone who has definite information, please alert.)

 

 

High-cost consultants: MAS is said to have employed more than 17 different consultants and more are being employed - Australian and British consultants. One consultant is said to be paid RM5,000 per day, while others are paid in excess of RM2.0 million per year.

 

The latest addition to this list of consultants is said to be a lady hired from Citibank Singapore, who is paid RM60,000 per month to take charge of services that include the handling of the outsourcing of MAS support services like IT, ticketing, administration etc.

 

 

Outsourcing the bleeds the books: It points to outsourcing contracts are also being eyed by companies related to Directors that sit on the Board of MAS. One of them is the Symphony Group that is controlled by Azman Yahya, formerly of Danaharta, who happens to be a MAS Board member.

 

And typical of pundits' pun, there is a final spear that pierces at that rumoured RM1 million oil painting hanging in the Chairman's office wall.

 

As for me, I will read it for entertainment as I only believe in what I see in the quarterly financial reports, which must be submitted to Bursa Malaysia on a timely frequency. That's where you can sniff out the excess baggage that prevents MAS from flying high.

 

More at SangKancil site:

http://groups.google.com/group/sangkancil/...4377b4634435667

 

http://groups.google.com/group/skletter/br...b673a71285379cb

 

[Ruiz Razy 1]

......It is sad, but I'm not supprise!

 

This is what happens when politics and practically everybody wants to be involved and claimed that they know more and what's best for the National Airline.... when in actual fact that they do not know. .... typical human arrangonce and disrespect for the nation.

 

It will fly high again only if the ones with the right qualifications and experiences are involved and those that do not know airline businesses should just shut up.

 

 

[kandiah k 0]

So there goes our national airline.......

[Rozhan 0]

In my opinion, often times, the grapevine eventually turn out to be very true.....

[Sandeep G 1]

ACA gonna be kept busy I hope. I also hope that our national airline recovers from this... this leak to the media can serve as a blessing in disguise for the airline which may have to FINALLY clean up its act!

 

Look at the turnaround Air NZ made!

[Edwin Yii 0]

yah they should start to clean u its up and take steps to gain more profits ...!!

 

And typical of pundits' pun, there is a final spear that pierces at that rumoured RM1 million oil painting hanging in the Chairman's office wall.

[S V Choong 4]

With that, pundits and punditary spin - the juiciest to come is by one A. Imran who posted an opinion piece in Sang Kancil listserve, here and here.

 

Fortunately, it is not K. Imran or Imran K

 

Look at the turnaround Air NZ made!

 

Exactly!

Edited November 17, 2005 by S V Choong

[Isaac 0]

May be they should privatise it again ? Not to a minister, though.

Edited November 17, 2005 by Isaac

[Sandeep G 1]

Give it to Tony Fernandes,

 

he seems to know what he is doing!

 

Long Live Air Asia! Hidup MAS!

[Walter Sim 1]

that was exactly what i was thinking of!

 

MH seems to be doing very well if you're looking at the flights, flights to Aus, or to the UK are filled to the brim, but why still losing money? Even after raising the fuel surcharge. Somethings wrong with the management. If Idris Jala does not do anything better perhaps worse than Tajudin Ramli or Ahmad Fuad, get Tony in.

 

ROFL, if that happens.

[Isaac 0]

Give it to Tony Fernandes,

15658[/snapback]

Definately no, as they might go all Airbus

 

Perhaps our government should sell MAS off to one of the local tycoons (definately not to a foreigner).

Edited November 19, 2005 by Isaac

[Isaac 0]

By the way, in an interview with MAS ex-CEO or Chairman (couldn't remember). He suggests MAS to reconfigure all of their aircraft.

[S V Choong 4]

By the way, in an interview with MAS ex-CEO or Chairman (couldn't remember). He suggests MAS to reconfigure all of their aircraft.

 

WTF, Tajuddin Ramli ??

Edited November 19, 2005 by S V Choong

[Edwin Yii 0]

WTF, Tajuddin Ramli ??

16091[/snapback]

 

pwnt.....

[TK 0]

sometimes it is too hurt to read and listen of what i saw and heard first hand.

 

I may dont know much about running a business, but there are times i know what basic economic is.

 

They blame here and there, mostly staff of not doing the right things...

when i say staff...i mean the lower end here.

 

A Pilot is not a high end manager level, as they see us just a driver.

It may be true...Just tell me where to go and i will fly the plane there honestly.

i dont lie to passenger of where we are going.

The cabin crew dont lie what they serve or what we have on board.

 

But the new seats, new service deliveries, changing the cups and glasses are the expensive things they dont see...and more...

 

Money comes from the government...tax payers money...too bad the pilots had the 25% increase of pay...but it has been delayed for 400 days!!!!

It didn't stop the pilots leaving for a greener sand dunes.

 

On the higher end of "staff"...i just pray that they will do the right thing for now.

I see MAS suffer by mismanagement, puppet master are everywhere.

I wish one day MAS will have a better puppet to Master all this things right!!

 

I am a proud employee, especially working with Malaysia Airlines. I love this company. Almost 90% of the staff here are honest with their job. They do well and they did made this airline fly.

Its been 11 years since March 1994 i joined the airline, not to forget, i started in DEC 1992 in australia as MH cadets.

 

Its too painful to think when i have to carry 200+ pax and crew to their destination safely....as i am doing an Honest job...i dont lie and i dont take peoples money.

 

To those who do and still does in MH....i wish there would be an end...will it be..?

 

as the title says...."never ending".....sad but true.

 

[Edwin Yii 0]

nicely put Tk..

well according to The Star - Bizweek..

 

MAS: List of measures being reviewed

 

1.Bring up MAS'RPK closer to that of regional rivals

 

2.Price airfares according to demand by region and travel periods

 

3.Drop unprofitable routes

 

4.Realign network to attract high quality business traffic

 

5.Join an alliance

 

6.Enhance Enrich programs

 

7.Relook how it procures inflight meals

 

8.outsource support funtion ie:engineering unit

 

9.relocate HQ to Subang

[H Azmal 0]

Hey, anyone know more about that MASEU- Siti NUrhazliza fiasco?

[Raj 0]

9.relocate HQ to Subang

 

 

Edwin what do they mean by relocate HQ to subang??

[Sandeep G 1]

All the things Edwin has mentioned are vitally important to the success and profitability of MAS in the future.

 

One must always remember that despite government majority shareholding at MAS, the airline is still a publically listed company. The objective of ALL PLC's is to maximise return to shareholders!! MAS does not do this.. The perception at MAS is that it's a government subsidised "SERVICE". The airline is not just a service.. it's an industry that in economic terms has the potential to contribute much to national GDP, employment etc.

 

The Securities Commision by right of MAS being a PLC ought to be investigating the fiscal management practices presently in effect at MAS. But here again is a conflict of interest.. the SC chairman is the former head of MAS!!! In his time, he was praised for turning MAS around into profitability.. I've just analysed the previous 5 years of financial statements, and it is quite clear to see that MAS only incurred profits in the 2003-2004 fiscal years due to the Wide Asset Unbundling (WAU) scheme which saw the disposition of a number of airline assets including the entire fleet to PMB.

 

Fiscal management practices at MAS are the main source of concern. This is where the focus has to be made. MAS has the will-power and potential - and that is demonstrated by the commitment of indiviuals working for the airline such as our own TK and Radzi. The cabin crews are winning awards because of their excellence and attention to detail. Image wise, MAS is a beautiful airline. Scrape the surface little bit and you will fing lots of 'corrosion'. All of this is attributable to poor management. The hiring of so-called international experts, blah blah blah has done nothing for the airline. MAS is a Malaysian company, and Malaysia has the talent locally - why not harness this instead?

 

Now we will see a new CEO, Mr. Idris Jala. The fact of the matter is that he has NO experience in the airline industry whatsoever! Yes he is a very successful oil executive, but the aviation industry is very different and in todays economic and political climate, the airline industry is very competitive and somewhat unstable. I hope that he has success in turning the airline around and restoring it to former glory. But the airline must be rid of puppet masters once and for all!! Only then will MAS truly succeed and live up to its potential.

 

Sorry for the length of this post

[Sing Yew 1]

All the things Edwin has mentioned are vitally important to the success and profitability of MAS in the future.

 

One must always remember that despite government majority shareholding at MAS, the airline is still a publically listed company.  The objective of ALL PLC's is to maximise return to shareholders!!  MAS does not do this..  The perception at MAS is that it's a government subsidised "SERVICE".  The airline is not just a service.. it's an industry that in economic terms has the potential to contribute much to national GDP, employment etc.

 

The Securities Commision by right of MAS being a PLC ought to be investigating the fiscal management practices presently in effect at MAS.  But here again is a conflict of interest.. the SC chairman is the former head of MAS!!!  In his time, he was praised for turning MAS around into profitability..  I've just analysed the previous 5 years of financial statements, and it is quite clear to see that MAS only incurred profits in the 2003-2004 fiscal years due to the Wide Asset Unbundling (WAU) scheme which saw the disposition of a number of airline assets including the entire fleet to PMB.

 

Fiscal management practices at MAS are the main source of concern.  This is where the focus has to be made.  MAS has the will-power and potential - and that is demonstrated by the commitment of indiviuals working for the airline such as our own TK and Radzi.  The cabin crews are winning awards because of their excellence and attention to detail.  Image wise, MAS is a beautiful airline.  Scrape the surface little bit and you will fing lots of 'corrosion'.  All of this is attributable to poor management.  The hiring of so-called international experts, blah blah blah has done nothing for the airline.  MAS is a Malaysian company, and Malaysia has the talent locally - why not harness this instead? 

 

Now we will see a new CEO, Mr. Idris Jala.  The fact of the matter is that he has NO experience in the airline industry whatsoever!  Yes he is a very successful oil executive, but the aviation industry is very different and in todays economic and political climate, the airline industry is very competitive and somewhat unstable.  I hope that he has success in turning the airline around and restoring it to former glory.  But the airline must be rid of puppet masters once and for all!!  Only then will MAS truly succeed and live up to its potential. 

 

Sorry for the length of this post

16238[/snapback]

 

I agree with you Sandeep. Still having exams, after which I will have a look at their previous years' Annual Report as well just for curiosity's sake.

[S V Choong 4]

relocate HQ to Subang

 

Not sure if they still have enough facility or space at their existing building to support this. But very true, they should probably move over there.

[Denny Yen 0]

So far, its mostly talk about "physical" changes...probably "cultural/mentality" change is important too.

 

Did anyone remember Carlos Ghosn, the 1st non-Japanese Nissan boss. Notwithstanding the Japanese mentality, his made radical changes in Nissan's management and company-wide philosophy. Read more at:

http://www.businessweek.com/magazine/conte...40/b3902012.htm

[Isaac 0]

Not sure if they still have enough facility or space at their existing building to support this.  But very true, they should probably move over there.

16251[/snapback]

Or they should just move to downtown KL.

 

[Mohd Yohan 0]

from a passenger/customer point of view id say-->

 

1) make the transport from KL-KLIA cheaper...the ERL cost are ridicilous (i dont care wheather its mas responsible or not as long as i know mas i govermant property, so do something to help something else, do i make a point here?)

 

2) reallocate domestic flights to Subang Airport

 

3) make a contest of something.... (never seen this before)

 

4) listen an evaluate customer deamands.......

 

5) more travel to the states

 

6) introduce interesting rates for special occasions...like h.raya etc

 

7) to be continued........

[Walter Sim 1]

dude, those things do not happen with a click of a mouse!

 

Well, my idea of costcutting is just cut the TV advertisments.. They cost millions IMO for each and i can see MH flooding them on TV. Probably that could be done perhaps..